Published: Wed, March 07, 2018
Sports | By Toni Houston

PNB fraud case: SFIO summons ICICI Bank Chief, Axis Bank MD

PNB fraud case: SFIO summons ICICI Bank Chief, Axis Bank MD

PNB dropped 2.3 percent and Axis Bank fell 1.4 percent, pushing the 10-member S&P Bankex Index to its fifth day of declines. As many as 31 banks had extended loan worth Rs 5,280 crores to Choksi's Gitanjali Gems.

The Serious Fraud investigation office has sent summons to officials of 31 banks for questioning. NS Kannan, executive director ICICI bank, was the leader of consortium of the bank that lent money to Gitanjali Group, it has been alleged.

Kochhar and Sharma will appear before the (SFIO) in Mumbai on Tuesday afternoon, sources in the agency said. We are working capital loan specialists to the Gitanjali gathering of organizations alongside a few different banks in the consortium...

The central bank also said the action on the two commercial banks is based on deficiencies in regulatory compliance "and is not meant to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers".

Both the lenders replied late in the evening, saying the SFIO action will not have any material impact on them. The report further states that officials of State Bank of Jaipur, KarurVysya Bank are also among others who are expected to be summoned by the Central Bureau of Investigations (CBI).

A slew of agencies, including the CBI and ministerial arms like the Enforcement Directorate as well as the SFIO are probing the PNB scam. According to PTI, V Srinivasan, Deputy Managing Director of Axis Bank was seen exiting the SFIO office in south Mumbai on Tuesday.

In a related development, mastermind of the PNB fraud and VP of Gitanjali Group of companies Vipul Chitalia was intercepted by the immigration authority at Mumbai airport after he landed from Bangkok.

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In a separate release regarding Indian Overseas Bank, the RBI said that a fraud was detected in one of the branches of IOB, resulting in the regulator imposing a penalty of Rs 2 crore on the government-owned bank.

Choksi along with his nephew, Nirav Modi, fled India in January.

It is alleged that firms colluded with officials at a city branch of state-run PNB to clear letters of undertakings (LoUs) without proper diligence, resulting in the scam.

In a response to the report, ICICI Bank has said the bank has "no exposure to the Nirav Modi group of companies".

The ICICI bank had earlier claimed that it was not exposed to the fraud committed by Nirav Modi group.

An LoU is a guarantee by a bank to pay another lender for imports by companies and is considered crucial for cross-border trade. Meanwhile, the ICICI Bank has said its exposure to the Gitanjali Group is not the largest among the consortium lenders.

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